AstraZeneca pounces on rival Alexion in deal worth £29.5bn

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British drugs giant AstraZeneca pounces on rival Alexion in deal worth £29.5bn

By Neil Craven, Financial Mail on Sunday

Published: | Updated:

British drugs giant AstraZeneca will acquire North American rival Alexion Pharmaceuticals in a deal worth $39billion (£29.5billion), it was announced yesterday. 

The deal would give Astra, which is based in Cambridge, access to Alexion’s expertise in rare disease treatments, blood disorders and immunology. 

It will also build on chief executive Pascal Soriot’s turnaround of the business, which has seen AstraZeneca’s shares rise 7 per cent this year and almost 70 per cent over three years. AstraZeneca, which also has major operations in Sweden and the US, was valued at £107billion on Friday, making it the third largest firm on the FTSE100 behind Unilever and BHP. 

Swoop: The deal would give Astra, which is based in Cambridge, access to Alexion’s expertise in rare disease treatments, blood disorders and immunology

There had been speculation that Soriot would seek to use the company’s soaring valuation as leverage to swoop on a smaller rival. 

Immunology is already a core focus for AstraZeneca alongside its development of treatments in cancer, cardiovascular, respiratory renal and metabolic diseases. 

Alexion shareholders will own 15 per cent of the combined company, the businesses said in a jointly-issued statement. 

Soriot said: ‘We look forward to welcoming our new colleagues at Alexion so that we can together build on our combined expertise in immunology and precision medicines to drive innovation that delivers life-changing medicines.’ The executive boards of both firms have unanimously approved the acquisition, the statement said. If shareholders and regulators consent, the acquisition is expected to close in the third quarter of 2021. 

Alexion chief executive Ludwig Hantson said: ‘We bring to AstraZeneca a strong portfolio, innovative rare disease pipeline, a talented global workforce and strong manufacturing capabilities in biologics.’ 

The offer values Alexion at $175 a share. Its shareholders will receive $60 in cash and around two AstraZeneca ‘American Depositary Shares’ (ADR) per Alexion share. The ADR stock is a mechanism used in the United States for trading shares in non-US companies. 

AstraZeneca has agreed $17.5billion (£13.2billion) of financing provided by Morgan Stanley, JP Morgan and Goldman Sachs to help complete the deal. The bank agreement will cover the cash portion of the acquisition, deal costs and refinancing Alexion’s existing loans. 

The statement said: ‘The acquisition is expected to significantly enhance cash generation.’

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